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With only one more day until the Vision Pro is available for release to the public, Apple finds its stock plummeting while its direct competitor Meta, finds their stock rising dramatically. In today’s article, I will be addressing why Apple stock is down so close to the launch of their new VR product and why Meta stock is rising as a result.

disclosure: the author of this article is invested in both Apple and Meta stocks

Apple Countdown for Vision Pro Launch

Why is Apple Stock Down?

Although many variables may contribute to the decrease of Apple stock, many analysts are pointing to disappointing early reviews of the Vision pro as a big reason Apple is struggling with a big dip in early performance.

The Vision Pro makes Apple a More Direct Competitor to Meta

Historically, Apple and Meta were not quite direct competitors. Facebook was considered a partner of Apple until the famous IOS release severely hurt Meta’s ability to make revenue through ads tracking of consumer behavior.

This forced Facebook to shift its focus and diversify, working to become the leader in VR technology. Meta, after acquiring Oculus, has made the most moves to become the best VR company in the world despite their latest disappointing sales in the VR space.

Apple Vision Pro Fails to Deliver

We recently wrote about the biggest issues with the Vision pro and it seems like they are coming to fruition. The Apple Vision Pro VR headset, while praised for its technological advancements, has faced criticism for not fully delivering an optimal VR experience. Reviewers have highlighted several issues that contribute to a less-than-ideal user experience, particularly in its attempt to provide augmented reality (AR) features using a virtual reality (VR) device.

Apple Vision Pro will Fail

Apple Vision Pro Continues disappointing AR Trends

One of the main challenges identified is the limitations of the headset’s camera-based passthrough system. This system is designed to simulate an AR experience by projecting an image of the user’s surroundings in real time. However, this approach encounters several problems, including:

1. Motion blur, particularly noticeable when moving the head and exacerbated in low-light conditions.
2. Distortion, including warped straight lines and flickering displays, like a microwave clock.
3. Blurriness in low-light conditions due to high-ISO noise reduction.
4. Fluctuating brightness levels, which can be distracting.
5. Limited color reproduction, with the headset only capable of displaying a fraction of the colors visible to the human eye.
6. A restricted field of view, which can feel like looking through binoculars.
7. Vignetting at the edges of the viewable area.
8. Color fringing, especially noticeable in bright environments.
9. Reflections in the lenses, particularly when viewing high-contrast scenes.

These limitations highlight the inherent challenges of using cameras and displays to recreate the natural viewing experience. While the Vision Pro excels in certain aspects, such as eye and hand-tracking, and offers impressive 3D video and AR applications, the issues mentioned above have a significant impact on the overall experience. The high price tag of the Vision Pro ($3,500) further limits its appeal to a broader audience, making it more of a niche product for VR and AR enthusiasts rather than a mainstream device.

Despite these drawbacks, the Vision Pro is still considered a glimpse into the future of mixed reality computing, with some reviewers commending its potential in areas like movie watching and web browsing. However, for the Vision Pro to achieve wider acceptance and use, these issues will need to be addressed, and the device may need to become more affordable.

Why Meta Stock is Up While Apple Stock Gets Sold

In short, VR is becoming a gateway technology where the company with the best consumer offering wins in VR. Unfortunately, savvy consumers are looking at the price tag of the Vision Pro and don’t see it as a 10x investment in comparison to the very well-performing, if slightly less powerful Meta Quest 3.

Stock owners may feel this tension and feel Apple is making the wrong moves with such an expensive but vaguely usable device.

Both MKBHD and The Verge have commented on the very unique features of the Vision Pro, but remark it does little to demand such a hefty price tag.

“the Vision Pro also represents a series of really big tradeoffs — tradeoffs that are impossible to ignore.”

Nilay Patel of The Verge

 

The History of Apple and Meta Competition:

Apple and Meta have recently been trading blows, with both companies facing their own set of challenges and opportunities. Apple, known for its iconic products and robust ecosystem, has recently seen a dip in enthusiasm among Wall Street analysts. Despite the growing success of its services sector, which saw a significant increase from $78 billion in 2022 to $85 billion in 2023, concerns about regulatory scrutiny and potential competition enforcement loom on the horizon. Furthermore, Apple’s reliance on Google as the default search engine in Safari, a lucrative part of its services business, could be at risk due to antitrust cases against Google. These factors contribute to a somewhat subdued outlook for Apple, especially compared to its peers in the tech industry.

Meta, on the other hand, has had a remarkable journey with its stock performance. After a challenging 2022, Meta’s stock surged by 194% in 2023, marking its best-ever annual return. This impressive rally indicates strong investor confidence in Meta’s future, possibly fueled by its new ad formats and AI initiatives. However, it’s important to note that this turnaround came after a dismal performance the previous year, highlighting the volatile nature of tech stocks.

The Fight for the Future of AI

Both companies are navigating a landscape where artificial intelligence (AI) is becoming increasingly important. While rivals like Microsoft and Meta are actively promoting their advancements in AI, Apple has adopted a more subtle approach. CEO Tim Cook has emphasized that AI is already an integral part of Apple’s consumer experience, albeit without the explicit marketing focus that others might employ. This strategy reflects Apple’s focus on the user experience and the seamless integration of technology into its products.

The contrasting strategies of Apple and Meta in addressing AI and other technological advancements, coupled with the differing market reactions to their stock performances, illustrate the dynamic and unpredictable nature of the tech industry. As these tech giants continue to innovate and adapt, their stock performances will likely remain a subject of keen interest for investors and market watchers alike​

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